Cheap loans for the Irish

michaels

I'm sure inspector monkfish could supply us the relevant 5 year libors but I suspect there is much more profit built in to the UK rate than the EUR one. Mortgage lending in the UK is a lot less competitiv ethan before. If you assume with the 60% mortgages that the risk of loss to the bank on default is fairly small then the increase in the spread of fixed rates over the equivalent period libor ttranslates directly into more profit for th ebanks. Same for the svrs, the spread of these over libor even for high deposit borrowers is in my opinion a disgrace. Prevoisuly a bank would have bene happy to make 1K profit pa on a low risk mortgage - now they seem to want to make 2 or 3 k.

The discussion about what is a 'low' rate is to me a complete red herring - for banks profitability the only comparison is with the banks cost of funds which should be libor. For the borrower then it is relative to inflation not some absolute comparison with where rates were in the past or what is happening to house prices.

StevieJ wrote: »

Looks like the British/Banks govt don't have much faith in Sterling :eek: Then again I
don't have much faith in the Euro I hope they are not going to lose stacks of money again on a bad decision.


Ray Boulger, of John Charcol, the broker, said: “It seems strange that UK borrowers are being charged so much more than their Irish counterparts when the economic conditions in both countries are similar.”


Halifax, part of the Lloyds Banking Group, is charging 2.74 per cent for a two-year fixed-rate deal to first-time buyers in Dublin. A five-year fixed-rate deal would cost borrowers in its home town of Edinburgh 6.14 per cent.Royal Bank of Scotland (RBS) is charging 2.95 per cent for a new mortgage in Ireland; in the UK, it charges 5.99 per cent for a similar product.


http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6182123.ece

mewbie_2

StevieJ wrote: »

If interest rates rose from 0.5% to 15% it would be in response to a extreme shock to the economy most probably caused by very high inflation, including wage and asset. Grateful if you could explain the scenario where this would not be the case.
If not stick to doing the laundry

Like me, you remember high inflation, and corresponding wage rises. However I think those were times when unions were strong and had clout. Now we have relaxed our employment terms, and got rid of the unions, plus the ability to outsource / downsize / etc I am not sure the two have to go hand in hand.

If we go to the IMF - then high interest and high taxation - but inflation in wages is not a given anymore.

chewmylegoff

StevieJ wrote: »

Halifax, part of the Lloyds Banking Group, is charging 2.74 per cent for a two-year fixed-rate deal to first-time buyers in Dublin. A five-year fixed-rate deal would cost borrowers in its home town of Edinburgh 6.14 per cent.

Comparing a 2 year discounted rate to a 5 year fix is a pretty useless exercise.

As an aside, last time I looked, Halifax wasn't in Edinburgh.

Edit: I note that you can get a 2.49% 2 year mortgage from HSBC in the UK...

StevieJ

mewbie wrote: »

Like me, you remember high inflation, and corresponding wage rises. However I think those were times when unions were strong and had clout. Now we have relaxed our employment terms, and got rid of the unions, plus the ability to outsource / downsize / etc I am not sure the two have to go hand in hand.

If we go to the IMF - then high interest and high taxation - but inflation in wages is not a given anymore.

The question was related to interest rates going up to 15%, why would they go up if there is no inflation? If the IMF get involved they will look to reduce public spending and probably increase taxes not increase interest rates.

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chewmylegoff wrote: »

Edit: I note that you can get a 2.49% 2 year mortgage from HSBC in the UK...

And unless you only had 2 years left on your mortgage, it would be madness to take such an offer.

mewbie_2

StevieJ wrote: »

The question was related to interest rates going up to 15%, why would they go up if there is no inflation? If the IMF get involved they will look to reduce public spending not increase interest rates.

My reading of the IMF stance, which admittedly comes for the letters page of Heat magazine while in the doctors surgery - my reading tells me if IMF then public spending cuts, higher interest rates and higher taxation. Not one or the other. You saw the budget figures and the response from other organisations bordering on utter disbelief. The country is in a big mess, and eventually the sorting out will have to come.

StevieJ

[QUOTE=chewmylegoff;21086471]Comparing a 2 year discounted rate to a 5 year fix is a pretty useless exercise.

As an aside, last time I looked, Halifax wasn't in Edinburgh.

Edit: I note that you can get a 2.49% 2 year mortgage from HSBC in the UK...[/QUOTE]

I agree but they also said

Royal Bank of Scotland (RBS) is charging 2.95 per cent for a new mortgage in Ireland; in the UK, it charges 5.99 per cent for a similar product.

StevieJ

mewbie wrote: »

My reading of the IMF stance, which admittedly comes for the letters page of Heat magazine while in the doctors surgery - my reading tells me if IMF then public spending cuts, higher interest rates and higher taxation. Not one or the other. You saw the budget figures and the response from other organisations bordering on utter disbelief. The country is in a big mess, and eventually the sorting out will have to come.

How would you have an IMF stance when they have not been asked for assistance?

mewbie_2

StevieJ wrote: »

How would you have an IMF stance when they have not been asked for assistance?

Perhaps stance was not the right word, maybe position woudl be better. Anyway. They have not been asked for assistance, maybe they will not be asked for assistance. But it has happened before, and we are possibly in a worse mess than before.

So.. if.. and it's a medium sized if... if we have to ask the IMF to help us out of this mess then my previous statement stands. But I'm not going to argue the same point over and over again. It's boring.

So if you post again... you win.

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My view is that the IMF will be called before the end of 2011, Darling's 'growth' figures are so far wide of the mark it's not funny, I don't think there will be a single quarter of growth before the end 2010, this year, in my view, we will see over -5% negative growth.